5 cryptocurrencies to watch in 2022

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Highlights

  • It is the last quarter of 2021 and time to know which may be the best cryptocurrencies in 2022
  • Bitcoin and Ethereum serve different purposes. Both can see further adoption in 2022
  • ADA and Axie Infinity bring unique aspects to the world of blockchain and are an interesting watch
The year 2021 has so far been a mixed bag for cryptocurrencies. It was the year when Bitcoin touched a new high of nearly US$65,000. This was followed by a crash and Bitcoin lost almost half of its value.

But the crypto world is not about Bitcoin alone. The most important term is ‘decentralizationdecentralization’. With the best use of underlying blockchain technology, new platforms with their own native tokens are emerging. These are trying to weed out the role of intermediaries and centralized authorities from finance.

Best Cryptos to watch in 2022

Not just these decentralized finance (DeFi) platforms, even DeFi games captured investors’ attention in the year 2021.

Against this backdrop, let us find out which can be the top five cryptos of 2022. Now that we are into the last quarter of 2021, these five can be an interesting investment destination.

1. Bitcoin (BTC)

The most popular cryptocurrency in the global cryptocurrency market, Bitcoin, has shown a major sign of rebounding after experiencing a massive drop from the all-time high of US$68K. Multiple companies in different sectors across the world have opened payment systems with Bitcoin. It has even attracted the interests of governments whereas El Salvador is set to build a Bitcoin City in the nearby future. The exposure to Bitcoin has instigated crypto investors to realize that Bitcoin has the best growth potential in 2022.

2. Ethereum (Ether)

Ethereum is a well-known player. It’s the world’s second largest crypto by market value, after all. And it’s been around since 2015. But there’s a lot more to come for Ethereum. And 2022 may be its biggest year yet. Why? Because the blockchain is set to fully release an important upgrade. Ethereum 2 will solve the biggest problem facing Ethereum right now. And that’s transaction speed. Today, Ethereum processes only about 30 transactions per second. But after the upgrade, it may process as many as 100,000. That’s because of two improvements. First, a move to the proof-of-stake validation method — this cuts out the time-consuming validation method that involves complex computations. Instead, it grants validation power to validators according to coins held. Second, Ethereum is adding shard chains to relieve congestion on the main network. If the upgrade’s launch goes smoothly, this crypto giant may get even bigger.

3. Solana (SOL)

2021 has been an eventful year for cryptocurrency as a whole, but one of the more remarkable storylines of the year was the sudden emergence of Solana, which went from accounting for just 0.01% of the market to more than 2.6% by early December. The DeFi field – characterized by smart contracts, a trustless ecosystem and the unapologetic cutting-out of third-party financial gatekeepers like banks and centralized exchanges – is practically guaranteed to rise in prominence in the years ahead. Anyone placing a wager on DeFi’s continued growth would be well served to invest in Solana, a developer-friendly network with far lower transaction fees than Ethereum. Solana’s low fees, maturing ecosystem and promising future in DeFi make it one of the best cryptocurrencies to buy.

4. Cardano (ADA)

The sixth-biggest cryptocurrency by market cap, ADA is one of 2021’s most talked-about altcoins. The native coin of the cardano blockchain, ADA has gained more than 1,000% so far this year to become one of the best-performing assets in the cryptosphere.

“Often dubbed as ‘ethereum killer’ by its core proponents, ADA is currently taking a breather as traders used the all-time high levels of US$3 [in September] to book profits,” says Valecha.

ADA started the year with much hype surrounding the launch of its Alonzo hard fork upgrade, which took place in September and dramatically expanded the token’s functionality.

Despite skeptics predicting a long delay, “the IOHK developer foundation announced a successful transition to a full-fledged innovative and smart contract platform based on the ADA blockchain,” Valecha notes. (IOHK is the company contracted to design, build and maintain the cardano platform.)

Moreover, the introduction of cardano’s Plutus scripts has enabled developers to build decentralized applications in the ecosystem. Plutus is a programming language for writing smart contracts in the cardano blockchain. “While the full functionality of it may take time, ADA will draw further investor attention and interest,” says Valecha.

These technical enhancements and the growing popularity and adoption of DeFi and smart contracts bode well for ADA’s current and continued demand, which could further fuel the coin’s price performance in 2022.

5. Avalanche ( AVAX)

What Axie Infinity does is it allows gamers to earn the AXS token through in-game battles. These tokens can be used to govern the infrastructure of the game. This effectively means that users have a control over design and other aspects. Not only this, each Axie –creatures within the game — is a non-fungible token (NFT). NFTs, we know, were the other dominant force in cryptos in 2021.

Axies are unique and their value is decided by the features they possess.

On January 1, 2021, AXS was trading at nearly US$0.5 apiece. At the time of writing, it was trading at nearly US$123 apiece. Axie’s popularity owes to the enthusiasm of gamers and their inclination toward the blockchain tech. If the momentum sustains, 2022 can be another big year for AXS.

Conclusion

Many cryptocurrencies have great potential and have allowed their investors to make huge returns in 2021. BTC and ETH have seen their highest-ever prices this year, and other ALTs like Solana have jumped thousands of percent. 2022 will likely see other incredible moves like these.

Cryptocurrency investing requires analysis, patience, and quite a bit of luck. We recommend not investing more than you can afford to lose in any single crypto and expect significant increases or declines with all crypto.  It may be best to have a basket of various cryptos to smooth these changes but even this still has risks. If you are going to invest, understand the market, act wisely, and believe in yourself and your investment, hope for a big gain but be willing to take a loss.

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